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Saving coffee by spending more

'Fair-trade' certification for specialty beans aims to keep growers on their land in the developing world

July 02, 2003|By James P. DeWan, Special to the Tribune.

Back in the day, milk was milk, vegetables came in cans, and everybody got their chickens from a funny-looking guy named Frank we all knew from TV.

Nowadays, we prefer to eat chickens that have led fulfilled, free-roaming lives. We like our vegetables grown the old-fashioned way, free of pesticides and genetic engineering. We want milk from cows that have not been fed growth hormones.

And we want to see the labels that prove it.

Even coffee, once the beverage of the working Joe who became its namesake, increasingly finds itself with a label of certification. Unlike dairy products, vegetables and poultry, though, the certification of coffee has less to do with the quality of the product than it does with the condition of the producer.

Fair Trade Certified coffee, as its label proclaims, is the product of a 15-year campaign begun in the Netherlands by an organization called Max Haavelar. It began certifying products produced by Third World cooperatives that provided a decent standard of living for farmers while maintaining the environmental integrity of the land.

Today, fair-trade certification organizations exist in 17 countries in Europe, North America and Asia. The U.S. agency, TransFair USA, was founded in 1998. All certification organizations worldwide are part of an umbrella group based in Bonn, Germany, called Fairtrade Labelling Organizations International.

Although fair-trade coffee constitutes only 1 percent of the coffee market nationwide, its share of the specialty coffee market, where it is being directed, is 3 percent and climbing.

"To date, we've signed up over 200 companies, ranging from Starbucks to Thanksgiving Coffee and Dunkin' Donuts," said R. Haven Bourque, marketing and communications director for TransFair USA. "We estimate that fair-trade coffee is available in over 12,000 retail establishments nationwide."

According to Bourque, fair-trade certification requires that producers of coffee and purchasing companies adhere to five criteria:

- Democratic organizations: Individual coffee farms must be family owned and operated, and the farmers must belong to democratic cooperatives controlled by their members.

- Access to credit: Because coffee is only harvested once or twice a year, the purchasing companies must agree to provide pre-harvest credit or financing to the producers to allow farmers to survive until the crop comes in.

But why would any self-respecting business owner pay $1.26 for a pound of coffee when it's only fetching 60 cents a pound on the commodities exchange? In this case, producers and retailers are betting that consumers of specialty coffee will view environmentally and socially conscious beans as a premium product.

And how did coffee growers get in this fix? Ted Lingle, executive director of the Specialty Coffee Association of America, believes it all boils down to the fact that U.S. agribusiness is so subsidized.

"Because coffee is not subsidized [in the developing world] the way American crops are," Lingle said, "an inordinate number of Third World farmers look to it as one of the few arenas in which they have a chance to compete in the world market."

This popularity of coffee among growers in developing countries has led to a worldwide glut, with the result that the market price is now lower than the cost of production. Thousands of family farms are going under.

The lack of work in the agricultural sector is a crisis that goes well beyond the per-pound price of coffee, Lingle said.

"People don't always make the connection," he said, "but the fact that illegal immigrants are clogging up our emergency rooms because it's the only way they can get health care, and the stories we hear about the workers suffocating in the back of trucks in Texas, it's all because at the end of the day these farmers don't make enough money and they have to abandon their farms."

With the wholesale failure of farms over widespread areas, another effect of the coffee glut could be the disappearance of regional varieties of coffee, known in the industry as "origins."

Kenneth Davids, consultant and editor of the online publication The Coffee Review, sees this possible extinction as disastrous. He believes the culprit is a vast underpricing of coffee in general.